Oil and Gas Supplies

Part of the debate – in Westminster Hall at 2:57 pm on 12 October 2005.

Alert me about debates like this

Photo of Jo Swinson Jo Swinson Opposition Whip (Commons), Shadow Spokesperson (Culture, Media and Sport), Liberal Democrat Spokesperson (Culture, Media and Sport), Liberal Democrat Whip 2:57, 12 October 2005

I congratulate my hon. Friend Dr. Cable on securing this debate on gas and oil prices and supply. It is particularly timely given the huge hikes in oil prices over the summer months. The impact of the hurricanes in the US, coupled with uncertainty in the middle east, has inflated the price of fuel. I would like to focus on what that means for people in our constituencies across the country and, let me put it bluntly, on fuel poverty.

For some people, a change in fuel prices makes the difference between heating their home properly or not. It is particularly fitting that, today, there are members of the National Pensioners Convention lobby just outside this Room, because many of those worst hit by rising fuel prices are pensioners. Figures from the Office for National Statistics suggest that each winter there is an increase of between 20,000 and 50,000—depending on how cold it is—in the number of pensioner deaths. Not all of those deaths can be directly related to cold homes, but fuel poverty is certainly a contributing factor in the increasing number of deaths in the winter.

It is estimated that there are approximately 1.2 million households living in fuel poverty across the UK. Of those, 1 million are considered vulnerable households. The Government's 2003 energy White Paper set targets on reducing fuel poverty. They included ending fuel poverty in vulnerable households in the UK by 2010 and eradicating it in England and Scotland by 2016, and in Wales by 2018. I appreciate that fuel poverty is not solely under the jurisdiction of the DTI—it obviously has an impact on the Department for Environment, Food and Rural Affairs and the Department of Health, too—but part of the problem when dealing with the issue is that no one Department is solely responsible for it. I would welcome the Minister's comments on that.

Competition between energy companies has actually lowered prices since 2001. The period since then has been good for consumers, and that has enabled many households to escape the fuel poverty trap. However, recent double-figure percentage rises in energy costs mean that those households that escaped the fuel poverty trap may be plunged back into fuel poverty this winter. National Energy Action suggests that, since 2003, gas prices have gone up by 20 per cent. and electricity prices by 15 per cent. Of course, that means that many households that were not previously considered fuel-poor will run into this problem.

I would also like to give examples of good news in tackling fuel poverty. Hon. Members may be aware that, in Scotland, there was a drop of 50 per cent. in fuel poverty between 1998 and 2002. That was achieved partly through two key initiatives: the central heating programme launched in 2001 and the warm deal scheme, which dates back to 1999. Those schemes were implemented for all pensioner households, regardless of the benefits that they received. Without being means-tested, they were entitled to have central heating installed in their homes.

Furthermore, properties were insulated and subjected to energy efficiency measures, which helps people to save money on their fuel bills year in, year out. Almost 40,000 households in Scotland have benefited from the installation of central heating. That obviously has an impact on fuel poverty. Using less energy costs less, so any measures that can be taken to help homeowners and tenants increase the efficiency of the energy used in their homes will certainly help fuel poverty. Such methods conserve scarce resources, too.

My hon. Friend the Member for Twickenham looked to the future and talked about alternative technologies. It is important to remember that it is much cheaper to conserve 1 GW of electricity than to create the capacity to generate an extra gigawatt. We must therefore make more efforts to encourage people to save energy in their homes and throughout business and industry. We must also pursue renewable sources of energy. They will be a huge part of the solution to the problem in the future. In time, such action will reduce our dependence on gas and oil and, of course, renewable sources of energy are cleaner and more sustainable.

The target throughout England and Wales is to increase the production of renewable sources of energy to meet 20 per cent. of energy needs by 2020. In Scotland, an even more ambitious approach has been taken; the target has been set at 40 per cent. We need to be ambitious about such issues and support industries that are developing those technologies. Their costs may be higher in the interim, but with the Government's support we should be able to ensure that, in future, not only will companies develop technologies that can help to meet our energy needs, but there will be huge economic advantages to the country. We need only to consider countries such as Denmark: it has become a world leader in wind farm technology, which will clearly become increasingly important in the future. I hope that the Minister will address such matters in his response.